For anyone who doesn’t work in accounts receivable, accounts receivable might sound like a simple process. Money comes in, you mark that the client has paid and you deposit the money into the business bank account. Done. But those who work with it daily are very much aware that accounts receivable is rarely that straightforward. As the money comes in, the process of figuring out who and what the cash is actually for can get pretty tricky. If you are using a manual system, there is a lot of data to work with. You will have to do everything from correcting old information to inputting new data, alongside other tasks like communicating with customers and settling disputes.
So how can you speed up the accounts receivable process, while also reducing errors and improving cash flow? Here are our four top tips:
1. Ditch the spreadsheets
Spreadsheets can be powerful and effective tools when utilised properly. They’re also convenient as you probably already have the software on your computer.
However, they’re just not suitable for the extensive and often complicated information that needs to be collected and stored during the accounts receivable process. Spreadsheets are prone to mistakes, they’re difficult to keep updated and can get unmanageable if there’s too much information. Plus, finding the right piece of data within a large spreadsheet can be tricky too.
2. Automate
Accounts receivables can be a monotonous process that requires a lot of data input and searching for information. While people can do the task, it can be a slow and tedious process that requires careful attention to detail to avoid mistakes.
Why not let computers do the heavy lifting and process the information much faster and more accurately. By automating accounts receivable, you can improve your own data. Furthermore, you process payments faster and free up time so your accounts receivable team can provide better customer service.
3. Invoice electronically
Sending out e-invoices can provide a number of benefits. For example, clients will receive their bills almost immediately and you don’t have to spend money on printing costs or postage.
Another benefit of e-invoicing is that it can speed up accounts receivable. As it’s all done over the computer, you can enjoy better data accuracy, while ensuring that all compliance standards are met. It also offers enhanced account reconciliation. Customers can send electronic remittance advice with the payment, providing key information about invoices paid, as well as debits, credits, and adjustments.
4. Analyse results
Regular reviews of your accounts receivable function can help to prevent defaults and identify other risks before they become problems. This is often overlooked because data analysis and running reports are time-consuming and complicated if you aren’t using the right tools. Automating your accounts receivable will minimise defaults and help make this process faster.
